BOP surplus falls to $1.473B in November

The Philippine payments position continued to register a surplus for the 10th consecutive month in November, albeit slower than the previous month, as the government withdrew foreign currency during the month to pay its debt obligations.

Data released by the Bangko Sentral ng Pilipinas (BSP) showed that the balance of payments surplus fell to $1.473 billion in November from $3.435 billion in October, but higher than the $541 million the same month last year.

The BOP consists of Philippine transactions with the rest of the world during a specific period. A surplus means more funds entered the country, while a deficit means more funds went out.

"The BOP surplus in November 2020 reflected inflows mainly from the BSP’s foreign exchange operations and income from its investments abroad," the BSP said in an accompanying statement.

"These inflows were partly offset, however, by the foreign currency withdrawals the National Government (NG) made to pay its foreign currency debt obligations," it added.

The latest figure brought the year-to-date BOP surplus at $11.786 billion, higher than the $6.271 billion in the comparable period in 2019, supported by higher net foreign borrowings and lower merchandise trade deficit.

The BSP also reported sustained net inflows from personal remittances, foreign direct investments, and trade in services during the 11-month period.

The BOP position reflects an increase in the final gross international reserves (GIR) level to $104.82 billion as of end-November, versus $103.8 billion as of end-October.

This is equivalent to 11.2 months' worth of imports of goods and payments of services and primary income and is about 0.2 times the country's short-term external debt based on original maturity and 5.3 times based on residual maturity.

"The latest GIR level represents an adequate external liquidity buffer, which can help cushion the domestic economy against external shocks," the BSP said. — BM, GMA News